Simple and Genuine Home Business Plan
I want to sell online but I will be successful?
Have you got an idea for an online business or someone else suggested to you? If you cannot afford to throw money out the window you need a method to estimate the potential profit and the chances of success. But where shall you start from?
Step 1 - Estimate Traffic
Any online business needs traffic. Without traffic there are no sales. There is no sales tax. There is a direct relationship between quantity and quality of traffic and sales you will.
So the first step in evaluating your ideas is to see about how the Internet is searched for the product or service that you want to sell it.
To start you need an account of Google Ad words. It's free and you can create one in minutes.
Besides the fact that it lets you do your advertising, Google Ad words has a tool - Keywords Tool - which allows you to quickly identify:
- · Which are the most frequently searched words or phrases that relate to your products
- · How big is the competition on each of these words/phrases
Have you created your account? Enter to the menu Tools and choose Keyword tool.
You will see a window with a form where you can enter keywords to find variants and to obtain estimates of traffic.
IMPORTANT: Even top form says 'Results is tailored to English, United States'. Click on the link Edit to choose English.
Now you can start using this valuable tool for anyone who wants to sell something online.
Let's take a quick example: You want to open store card marketing.
I therefore will be looking for statements that contain these suggested words. Let's see what I get:
- In column 1: I list the words and phrases that contain 'books' or 'marketing', initially sorted by relevance.
- In column 2: how intense is the competition on the advertising spaces for the respective word/phrase.
- In column 3: the number of searches on Google in June, made from computers with UK IP addresses (according to the selection of which we discussed earlier)
- In column 4: the average number of searches per month, in the last 12 months, in any language in any country.
- In column 5: the head of the table, we can select the type of match. If you choose ' Broad ‘you will see how many searches including the word from column 1 or variants thereof. If you choose 'Phrase' you will see how many searches were made include the exact phrase/word of your choice (but can include other words in addition). If you choose 'Just ‘you will see how many searches were made to include only the word/phrase in column one and absolutely nothing else in the search string. And the last option 'Negative ‘shows you how many searches were made specifically excluding that respective word/phrase.
For starters choose option 'Broad' and then you will further refine the selection if necessary.
What I learned using this tool?
First I found that on average, over the last 12 months Google searches have been about 1000 for the combination 'marketing book' and its variants.
· I also learned that in June were 550,000 searches involving the word 'book' and that included 246,000 word ‘marketing’. Not very relevant because it does not necessarily looking for books or marketing who is looking for marketing books.
· I also learned in June 2400 that they were searching for 'marketing course' plus another 1900 'marketing course' so a total of 4,300 searches on this topic. That's interesting.
· Going down the list, I discovered that there were 5,400 searches for 'marketing strategies’. This is very Just useful information.
Already if I want to sell my books online marketing is quite clear what kind of evidence I would have to choose and promote in particular the shop and what keywords you should optimize certain sections of the store.
I already have ideas about what level of traffic can I expect if I advertise (and paid enough to be in a position above) for these keywords or gin eve if the top positions in organic results. And how all these figures refer only to Google and are approximate can multiply them by 1.5 to estimate the total potential.
But do not stop here. The next step is to find out what titles and known authors in marketing area have published their books already and I want to see how often people search for their books or for the authors names.
For example, I noticed that 'marketing management' had 3,600 searches in June. Given that there is a book with the same as mine written by a different author, I could see how many searches there are for this author?
Already we have discovered at least six new phrases are relevant to my store and I was convinced it would be wise to create a special page for this author (is normal to do that because he is considered an authority for this marketing area of expertise).
Keyword Tool also has other goodies
If I go down the page and I suggest other words that are key in my list but have about the subject. Searching for these words can further expand the list and you can better estimate the traffic.
All I need to do is that when I identify a phrase that might indicate an interest in marketing a book to note the number of searches and to add it to my list.
Result: picking up now all the collected data, I already know that the monthly volume of search marketing materials is over 25,000. Considering that I got only superficially tackled on the subject (I checked only a single search specific author or title) I can estimate the actual number of searches related to this topic of at least 50,000.
Let's go now...
Step 2 - Estimate Sales
Have at least 50,000 people interested in books and marketing materials. Not everyone will come to my site, but if I invest in advertising to bring 10,000 visitors to my site monthly.
Using Ad words with a conversion rate of about 1-2% (even more if the ad is well done, so not to attract the clicks done of curiosity) I can get 100-200 orders per month (for which I pay probably about 1,000 Euros.
I may take into account also that over about 12 months the traffic brought by search engines and partner sites (price engines, blogs, forums) can get another 10,000 visitors per month, so I can expect another 100 orders out of here.
I will take in account also the traffic from customers who have agreed to receive newsletters from me (the 200-300 customers that order every month probably get to a few thousand by the end of the year).
Altogether over a period 12 months, it has the potential to get between 300 and 500 orders each month. Now let's see how this is reflected in money.
Step 3 - Profit Estimate
To finalize the calculation I need to know the average percentage of the orders and my added percentage that it will ask for.
The book publishers will take 20 to 30% off my price, so let's say that the average is 25%.
Do not forget to drop the amount I spend for advertising which I have to subtract from my profit.
Note at the end
As I have repeated earlier, the calculations are approximate and relaxed. Above I have a business plan but a rough initial estimate of potential business.
If after doing this analysis you find interesting field you have to do a business plan in detail the first 12 months and a 3-5 year strategy.
They need to go more in detail in predicting potential traffic, shall state every assumption made (remember that we estimated 1-2% conversion rate, you'll have 5,000 visitors from search engines and other sites etc. .) identify the competitors and differentiation of these strategies, establish logistics and details of their costs, to estimate the evolution of the number of customers, etc. cash investment required.
The documents above are required not only to your plan and attract resources, but to be able to regularly assess where you are and perform the necessary corrections.
What to buy first: the horse or the cart?
When it comes to open an electronic store there is a somewhat natural tendency to start with what is seen on the surface, the most obvious thing: the technical solution.
Search options market, demand bids, and compare them. It is also looking at using others. Weigh the advantages and disadvantages of a free solution from a commercial.
Then choose a solution and move on. This is called to start on the wrong foot. Or to buy the horse before the cart to know what you shoot him.
Why not start with good technical solution?
Firstly because I do not know what do you need.
You can also look at what others are using. Can you make a list of facilities that you think you need.
The problem is that if you have not done the business plan, you did not say which products will sell to the customer profile, you have not defined work procedures, you have no idea how many people you need and what each will not know what requirements you have.
If you do not know what requirements you choose by ear that you find most interesting. Then when you start work you will find that the chosen is not exactly what you should. Front-end software may not store this information even as you want. Daily operations and updating of consumer marketing for quite a while.
Not a big problem until the volume of product sales and are growing. Employees become overloaded. People complain they have to click 3 times to do this and that and start coming in with demands for change. SEO expert comes in and says you have to change the links and put keywords and technical man from his shoulders so he cannot.
You discover that you have no choice: either hires more people or pay changes in initial solution. In extreme cases you get to migrate to another solution.
It is a pessimistic but you may happen to you. And instead of using development profits you will use to repair mistakes made in its infancy.
What are the advantages if you start planning?
First, know who and what will do and have an idea what's about the flow of information, paperwork and products from the supplier and to the final customer.
Do you know what associated costs are and about their effect on profits. You can identify activities that can be automated in order to save time and reduce the personnel costs.
You can identify the facilities that your technical solution MUST offer and those that would be useful to have.
You know what information you entered into the system and what information you need to extract from the system. What other systems must interact with your solution for maximum efficiency.
You can play with figures to see what budget you can allocate the technical solution as part of the initial investment.
When you look at a quote you can see if it's in your budget. If your budget is exceeded then think about the savings that would benefit from on the medium term and that would justify the price difference paid at the beginning.
There are just some of the benefits that bring your planning. Benefits that help you have a profitable store.
Because electronic commerce is profit or loss in logistics.
